Nvidia Halting Chipset Development

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Nvidia has confirmed that the company has essentially placed its Nforce chipset line on hiatus, given the legal wrangling between itself and Intel.

According to Robert Sherbin, the lead corporate communications spokesman for Nvidia, Nvidia will “postpone further chipset investments”.

Sherbin also dismissed a report that Nvidia was pulling out of the mid-range and high-end GPU market as “patently untrue”. But Nvidia’s recent chip introductions do imply a shift in the graphics company’s traditional stance is underway.

Nvidia’s launch of the Fermi architecture was a surprise not because of what it offered, but because of what was excluded: PC graphics. With the Fermi, Nvidia built in innovations like Parallel DataCache, a cache architecture for physics and ray-tracing algorithms, and IEEE-754-2008 floating-point accuracy, both of which analysts saw as unnecessary for the types of calculations performed by 3D PC games, traditionally Nvidia’s core market.

The emphasis on scientific applications seems to imply that Nvidia is betting its future on the workstation, as companies like 3Dlabs did, but trying to straddle the PC market as well. Rival AMD, by contrast, has shifted to a more cost-effective manufacturing strategy, and placed the PC at the focus of its marketing strategy. It hasn’t hurt that the Radeon HD 5800 cards AMD recently launched have provided a significant boost in performance.

“Nvidia’s walked a similar walk in the past, but this time seems to be taking a very different — consciously different — tone with Fermi,” Alex Herrera, an analyst with Jon Peddie Research, wrote in a blog post this week. “More willing to stick its neck out to aggressively pursue high-demand non-graphics applications, Nvidia has pushed GPU-compute to the forefront of its marketing campaign. And in doing so, it’s kicked gaming down a notch, if not by intent, then by default.”

Herrera noted that the Fermi launch was timed for the Game Developers Conference, where Oak Ridge National Laboratories was a launch partner, not a game company like iD or Crytek.

But Sherbin did not point to market issues as the reason for Nvidia’s decision to halt chipset development, but legal ones.

“We have said that we will continue to innovate integrated solutions for Intel’s FSB architecture,” Sherbin said in an email. “We firmly believe that this market has a long healthy life ahead. But because of Intel’s improper claims to customers and the market that we aren’t licensed to the new DMI bus and its unfair business tactics, it is effectively impossible for us to market chipsets for future CPUs. So, until we resolve this matter in court next year, we’ll postpone further chipset investments.”

Intel claims that its four-year-old chipset license with Nvidia does not cover the “Nehalem,” or Core series of microprocessors. Nvidia disagrees, and the matter will be hashed out in court in 2010. Nvidia still sells chipsets specifically designed for AMD’s line of processors, but has halted further development as well.

Intel, meanwhile, has publicly stated that it will combine graphics and a CPU inside of a multi-chip module with its Clarkdale and Arrandale processors. Both offer the option to use a discrete GPU, but de-emphasize their need. Meanwhile, Intel is prepping its own discrete graphics chip, code-named “Larrabee”.

“We’re not saying Nvidia’s turned its back on gaming; the company isn’t dumb,” Herrera added. “But seems as if it realized it was at the point that in order to secure a prominent seat at the computing table of tomorrow, it had to make a clear-cut choice; no longer can it afford to sit on the fence. Play it more conservative, and stay satisfied milking the discrete GPU market for as long as it can, even if it means the company might have to live with being a second-tier supplier down the road. Or go all-in, throw down as much money, know-how and persistence you can muster behind your vision of where computing should be headed. And then make it happen and damn the consequences. Well, it’s never been Jen-Hsun’s style to be wishy-washy, so all-in it is.”

Meanwhile, a story on the SemiAccurate Web site claimed that Nvidia is in the process of abandoning the mid-range to high-end GPU market, including canceling the GTX260, GTX275, and GTX285 and possibly the GTX295. Sherbin called the story “patently untrue”.

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